4 ms·

So you don’t think it was wrong to assume that the prosperous and highly unusual scenario of the Covid effects would be around for an extended timeframe that le

by cudgy 4y ago

So you don’t think it was wrong to assume that the prosperous and highly unusual scenario of the Covid effects would be around for an extended timeframe that legitimately would impact future cash flows that validated the huge increases in the value of almost all tech stocks? It made absolutely no sense to me and many other investors, but so many people drank the koolaid anyway, buying more stocks, hiring more people, pumping up the fervor, etc.

Apocryphon 4y ago
The fact that you're describing it as "drinking the koolaid" goes to show that it was a questionable assumption. Certainly, the worldwide pandemic created an uncertain atmosphere. On the other, everyone knew that the Fed was pursuing some very drastic actions. So why did so many tech companies simply go along with it? Seems like a lack of foresight and lack of willingness to challenge the status quo.
Temporary_31337 4y ago
You were right only because covid turned out to be pretty mild (so far) and things pretty much went back to normal. If we were still living in isolation then these increased valuations for Zoom etc made sense.
- cudgy 4y ago
  Zoom stock went from $67 to $512 from Jan 2020 to Oct 2020. Zoom earnings reached around $1 per quarter EPS or $4 per year during its short heyday in 2021-2022. It would take a century of earnings to be worth that price.
thrashh 4y ago
It made perfect sense from an investor‘s point of view. Buy the stock low, sell it before it drops. You’re usually investing in large public companies to make money, not “support the long term cause.” Also it made sense for the time period. Say you already had $10,000 invested in a company that sells restaurant supplies. Are you going to keep it in the company for the entirety of COVID while your money evaporates or put it into a tech company temporarily and then move it back afterwards?

by cudgy 4y ago

Apocryphon 4y ago

The fact that you're describing it as "drinking the koolaid" goes to show that it was a questionable assumption. Certainly, the worldwide pandemic created an uncertain atmosphere. On the other, everyone knew that the Fed was pursuing some very drastic actions. So why did so many tech companies simply go along with it? Seems like a lack of foresight and lack of willingness to challenge the status quo.

Temporary_31337 4y ago

You were right only because covid turned out to be pretty mild (so far) and things pretty much went back to normal. If we were still living in isolation then these increased valuations for Zoom etc made sense.

cudgy 4y ago
Zoom stock went from $67 to $512 from Jan 2020 to Oct 2020. Zoom earnings reached around $1 per quarter EPS or $4 per year during its short heyday in 2021-2022. It would take a century of earnings to be worth that price.

thrashh 4y ago

It made perfect sense from an investor‘s point of view. Buy the stock low, sell it before it drops. You’re usually investing in large public companies to make money, not “support the long term cause.” Also it made sense for the time period. Say you already had $10,000 invested in a company that sells restaurant supplies. Are you going to keep it in the company for the entirety of COVID while your money evaporates or put it into a tech company temporarily and then move it back afterwards?